_ Business plan_V.

01

M/s Shri * Food Products

WHEAT FLOUR MILL

PROPOSAL FOR
TERM LOAN & WORKING
CAPITAL ASSISTANCE
Business Plan

M/s Shri * P.Ltd

Survey No, , Andhra Pradesh.
 _ Business plan_V.01
COMPANY INFORMATION
Business Plan
S.No Particulars Details

01. Company M/s Shri * P.Ltd

02. Status Private limited company incorporated on * ROC, AP,
vide CIN No. *

03. Corporate Office

Factory

04. Web Site

05. Management

06. Statutory Auditors

07. Finance Consultants

08. Bankers

09. Business Setting up a 120 TPD Wheat Roller Flour Mill &
30 TPD Chakki Atta Project

10. Industry Food Processing

11. Status SSI Unit in the field of Food Processing
12. Highlights Belongs to existing profit making Group in the business
of Flour trading and marketing.
13 Cost of the Project
14. Means of Finance

15. Debt Equity ratio 1.54 : 1

16. DSCR 3.08
17. Payback period 3 years
18. Direct Employment 49 Personnel
19. Indirect Employment 50
20 Marketing Relationships Firm Commission agents net work in places
21. Break Even Capacity 35%
20. Technology Proven technology, promoters having experience
The Project
M/s Shri * Pvt Ltd is a private limited company incorporated in Andhra Pradesh, India promoted by Mr. *2010. The
promoters who have extensive experience in the Trading of Oil and Food Products have conceived the idea of
encashing their trading experience and going in for Food Processing industry. The company is proposing to setup
a Wheat Flour Mill of 120 Tons per day capacity along with a Atta Chakki Plant of 30 Tons per day processing unit
at Survey No, * just about 10 Kms from Hyderabad.
The unit proposes to produce Wheat Products such as Atta, Maida, Chakki Atta, Ravva and Bran ( By product )
of 150 Tons per day ( 120 + 30 ) to cater to the needs of Whole Sale and Retail needs of South Indian Wheat Market.
The required raw material is basically Wheat which is available in plenty from various parts of northern and western
parts of India.
Processed wheat products are staple food items in India .Consumption and Demand for the products proposed for
manufacturing by the company, is ever on increase due to increase in population, increase in per capita
consumption owing to various factors such as rise in disposable income, increasing value of time, increasing
demand for improved quality standard and hygiene of the products and non-economics of small-scale chakkis in
wheat segment.
The Company has obtained on long lease, 2_Acres of industrial land in
for implementation of the Project. The land has been converted
from agricultural area and is to be developed for setting up the production facilities
The total Investment of the project is estimated at Rs 578.00 Lacs which is proposed to be financed by the promoters
as well as term loan from Banks in 1 : 1.54 ratio.

Promoters
M/S Shri * Agro Products Foods Products has been promoted by Mr. *
.
Mr.Kamal Kumar Mundada (Director)- S/o Late Sri Kishan Mundada started his career in the
year 1991 after his school education. He entered the family business run by his father viz.,
M/s Mundada brokers who are commission agents for supply of crude edible oil to oil
refineries till 2006. Currently the business is handled by his cousins. For a couple of years
he assisted his young nephew who owns a proprietary concern ‘Anand Agencies’,
distributors of wheat products viz., Atta, Chikki Atta, Maida etc. He gained rich experience
assisting his nephew in the wheat products business. With this background, he started his
own business in 2007viz., ‘Shubham Agro Industries’, a partnership firm to manufacture
Chakki Atta at Kattedan industrial area. Presently the firm is clocking a turnover of Rs 6.00
Cr to Rs. 7.00 Cr per annum.

 Ashish Mundada S/o Sri Kamal Kumar Mundada after completing his graduation (B Tech in Electrical Engg)
in the year 2006, started his career as a channel partner to market the products of Idea Cellular. He
did this business for a period of 2 years and achieved a turnover of Rs 12 Cr each per year. He gave
up this business and joined as a partner of ‘Shubham Agro Industries’.

 Share Holding Pattern:

S.No. Name of each Partner % equity Role

contribution into
the Project
01. Mr. Ashish Kumar Mundada 15.00% Director
02. Mr.Radha Kirshna Bajaj 25.00% Investor
03. Mr. Ashish Kumar Bung 12.50% Director
04. Mrs. Chandrakala Bung 5.00% Investor
05. Mr.Rohit Agarwal 17.50% Investor
06. Mrs.Indra Mundada 10.00% Director
07. Mr. Kamal Kishore Mundada 15.00% Director
total 100.00%
 Details of the Associate Concerns:

Name of the Activity Nature of Annual Financing Status of

Concern Association Turnover Arrangements Account

Shubham Agro Food Sri Kamal Rs 7.00 Nil Standard

Industries Processing Kumar Crores.
Chakki Atta Mill Mundada-
(Partnership Director is
firm) a partner

The Products & The Process:

The Products proposed for manufacture are the different processed forms of
Wheat grain and as such are different forms in which Wheat is consumed.

Roller Flour Mill Chakki Mill

Maida 52% Chakki Atta 92%
Atta 15%
Ravva 8%
Bran 23% Bran 6%
Wastage-loss 2% Wastage-loss 2%
100% 100%

(a) What is Maida?

Maida flour is finely-milled wheat flour variety which is used to make Indian breads such as paratha and naan. It
is also used in Central Asian and Southeast Asian cuisine. Maida is a refined product of wheat. It is extracted from
the inner white portion of the wheat after the outer brownish layer is removed. After the flour is ground in a flour
mill, it is passed through a fine mesh (600 mesh per square inch) to obtain maida. Though sometimes referred
to as "all-purpose flour" by Indian chefs, it more closely resembles cake flour or even pure starch. In India, maida
flour is used to make pastries and other bakery items such as bread, biscuits and toast. Pastry flours available in
United States may be used as a substitute for maida.

(b) What is Atta

Atta is the main ingredient of most varieties of Indian, Bangladeshi and Pakistani bread. It is a whole wheat-
flour made from hard wheat grown across the Indian subcontinent. Flatbread made from atta, such as chapati,
roti, naan and puri, are an integral part of Indian cuisine. Hard wheats have a high content of gluten (a protein
composite that gives elasticity), as such, doughs made out of atta flour are strong and can be rolled out very thin.
Atta is obtained from grinding complete wheat grains. It is creamy brown in colour and quite coarse compared to
other types of flour. Since nothing is removed from true whole meal atta, all the constituents of the wheat grain
are preserved. Atta available in market varies in its fibre content from very low to whole of natural fiber in wheat,
around 12%.
(c) What is Ravva ?
Husk removed wheat is ground to form rava, and used extensively in south Indian cuisine, such as in Karnataka and
Tamilnadu, to make Rava dosa, Rava idli, upma, khichdi, and also sweets like Rava Ladoo and Rava halwa also
known as Rava Kesari. There is another form of rava known as Chamba Rava, which is an extract of wheat flour.
As this "Rava" is an extract of maida flour it is much finer. Rava may be described as the residues of milled material,
after the flour is ground in a flour mill (Chakki). It is passed through a fine mesh till flour and rava are separated.
Bombay Rava is used in Southern parts of India to make delicious dish called upma. It is also used as an additive
in some Dosa items, especially the Rava Dosa.

(d) What is Chakki atta ?

Atta is obtained from grinding complete wheat grains. It is creamy brown in color and quite coarse compared to
other types of flour. Since nothing is removed from true whole meal atta, all the constituents of the wheat
grain are preserved. Atta available in market varies in its fibre content from very low to whole of natural fibre in
wheat, around 12%. Traditionally, atta is made by stone grinding, a process that imparts a characteristic
aroma and taste to the bread. High bran content of true whole meal atta makes it a fiber-rich food. This
may help to regulate blood sugar as well have other health benefits. The temperatures attained in a chakki produced
by friction, are of the order of 110-125 deg C. At such high temperatures, the carotenes present in the bran
tend to exude the characteristic roasty smell, and contribute to the sweetness of the atta. The various quality
control parameters for the atta industry are Ash Content, Moisture Content,

(f) What is Bran?

Bran is the hard outer layer of grain and consists of combined aleurone and pericarp. Along with germ, it is an
integral part of whole grains, and is often produced as a by-product of milling in the production of refined grains.
When bran is removed from grains, the latter lose a portion of their nutritional value. Bran is present in and
may be milled from any cereal grain, including rice, corn (maize), wheat, oats, barley and millet. Bran should
not be confused with chaff, which is coarser scaly material surrounding the grain, but not forming part of the
grain itself. Wheat bran is fed to horses in the form of a warm porridge or mash. Bran mash is considered an
excellent way to get the horse to drink more water. It is also indicated for its laxative qualities. Bran is widely
used as a major component in foods for cows, buffaloes, goats, rabbits, guinea pigs, etc. Bran is particularly rich
in dietary fiber and essential fatty acids and contains significant quantities of starch, protein, vitamins and dietary
minerals. Bran is often used to enrich breads (notably muffins) and breakfast cereals, especially for the
benefit of those wishing to increase their intake of dietary fiber. Bran may also be used for pickling (nukazuke)
as in the tsukemono of Japan. In Romania, fermented wheat bran is usually used when preparing sour soups,
called borscht.

Wheat & Wheat Products– The Staple Food:

 Wheat (Triticum spp) is a grass, originally from the Fertile Crescent region of the Near East, but now
cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-
produced cereal after maize (784 million tons) and rice (651 million tons).
 Globally, wheat is the leading source of vegetable protein in human food, having a higher protein content
than either maize (corn) or rice, the other major cereals. In terms of total production tonnages used for
food, it is currently second to rice as the main human food crop, and ahead of maize, after allowing for
maize's more extensive use in animal feeds.
 Wheat was a key factor enabling the emergence of city-based societies at the start of civilization because it
was one of the first crops that could be easily cultivated on a large scale, and had the additional advantage
of yielding a harvest that provides long-term storage of food.
 Wheat grain is a staple food used to make flour for leavened, flat and steamed breads, biscuits, cookies,
cakes, breakfast cereal, pasta, noodles, and couscous and for fermentation to make beer, other alcoholic
beverages, or bio fuel. Wheat is planted to a limited extent as a forage crop for livestock, and its straw
can be used as a construction material for roofing thatch. The husk of the grain, separated when
milling white flour, is bran.
 Wheat germ is the embryo portion of the wheat kernel. It is a concentrated source of vitamins,
minerals, and protein, and is sustained by the larger, starch storage region of the kernel—the endosperm.
 Raw wheat can be ground into flour or - using hard durum wheat only, can be ground into semolina;
germinated and dried creating malt; crushed or cut into cracked wheat; parboiled (or steamed), dried,
crushed and de-branned into bulgur also known as groats.
 If the raw wheat is broken into parts at the mill, as is usually done, the outer husk or bran can be
used several ways. Wheat is a major ingredient in such foods as bread, porridge, crackers, biscuits,
Muesli, pancakes, pies, pastries, cakes, cookies, muffins, rolls, doughnuts, gravy, boza (a
fermented beverage), and breakfast cereals (e.g., Wheatena, Cream of Wheat, Shredded Wheat,
and Wheaties).

Nutrition
 100 grams of hard red winter wheat contain about 12.6 grams of protein, 1.5 grams of total fat, 71 grams
of carbohydrate (by difference), 12.2 grams of dietary fiber, and 3.2 mg of iron (17% of the daily
requirement); the same weight of hard red spring wheat contains about 15.4 grams of protein, 1.9 grams
of total fat, 68 grams of carbohydrate (by difference), 12.2 grams of dietary fiber, and 3.6 mg of iron (20%
of the daily requirement).

 Much of the carbohydrate fraction of wheat is starch. Wheat starch is an important commercial product
of wheat, but second in economic value to wheat gluten. The principal parts of wheat flour are gluten and
 starch. These can be separated in a kind of home experiment, by mixing flour and water to form a small
ball of dough, and kneading it gently

while rinsing it in a bowl of water. The starch falls out of the dough and sinks to the bottom of the bowl,
leaving behind a ball of gluten.

Background of Wheat in India

Wheat is a major food staple in India, and is crucial to India’s food economy and security. With wheat production
of 75 to 85 million tons annually and a large demand, India’s wheat economy is now the second largest in the
world. The marketed surplus from the production has also been rising and it is estimated that about 60-70
percent of the production now comes to the market (India, Directorate of Economic and Statistics 2010).
 Maida and Atta are required for daily human consumption directly, or indirectly by way of bread, biscuits,
sweets, cakes, confectioneries etc. However bran is the byproduct produced in the process of
manufacturing wheat products is used for making cattle feed.
 Major portion of atta is used for making Roti, part of daily staple diet in India. A part of atta
is also used for biscuits.
 Maida is mainly used for bread, biscuit, cakes, cookies sweets, confectionaries etc. and Bread is popular
snack food for lower middle-income group name as ‘Pav’. Premium range of the bread is popular breakfast
item among middle and upper income group in urban areas
 Suji is used for daily human consumption in various forms and specially used for infant foods

The Production Process: Technology

The processing of Wheat is done through running wheat in a roller system and the technology is very conventional
and time tested. Details of the processing together with a flow chart are available else where in this report.

Market for Wheat Products: The Food Processing Industry:

India is the world's second largest producer of food next to China, and has the potential of being the biggest with
the food and agricultural sector. The processing food segment accounts for USD
29.4 billion, in a total estimated food market of about USD 91.7 billion. The food processing industry is one of the
largest industries in India. It currently ranks fifth in terms of production, consumption, export and growth
prospects.
The Government of India has identified the Food Processing Industry sector as a high priority area. It has given a
number of fiscal reliefs and incentives to encourage commercialization and value addition to agricultural produce.
As per a study conducted by McKinsey and Confederation of Indian Industry (CII), the turnover of the total food
market is approximately USD 69.4 billion out of which value-added food products comprise USD 22.2 billion.
The total food production in India is likely to double in the next ten years and there is an opportunity for large
investments in food and food processing technologies, skills and equipment. Godrej Foods, Reliance, Namdhari,
ITC, Nestle, Ruchi Soya Industries, Tata Coffee, Tata Tea, RPG group, Subhiksha are major players. The Indian food
processing industry is primarily export oriented. India’s geographical situation gives it the unique advantage of
connectivity to Europe, the Middle East, Japan, Singapore, Thailand, Malaysia and Korea. One such example
indicating India’s location advantage is the value of trade in agriculture and processed food between India and
Gulf region.

Macro-Scene- Wheat Products:

Wheat is a cereal grain grown and consumed worldwide. Wheat is more popular than any other cereal grain use
in baked goods. Its popularity stems from the gluten that forms when flour is mixed with water. Without gluten,
raised bread is hard to imagine. Wheat is also preferred because of its mild, nutty flavor. Both the factors account
for wheat being the most widely grown cereal grain in the world. Today, thousands of varieties of wheat are
grown throughout the world, most requiring fertile soil and a temperate climate. Major wheat growing countries
include China, India, France, and Russia. Recent projections by the International Food Policy research Institute
(IFPRI) indicate that, by 2020, two-thirds of the world’s wheat consumption will occur in developing countries, where
wheat imports are estimated to double by 2020.
As noted earlier in this report, wheat demand worldwide is calculated to rise by 40% from 1993 to 2020 to reach
775 million tons. The expected increase in demand is partly motivated by population growth but also results from
substitution out of rice and coarse grain cereals as incomes rise and populations become increasingly based in
urban areas. (Source: Multi Commodity Exchange of India Limited) .
Growth in packaged Atta industry is driven by four factors viz. (i) Rise in disposable income, (ii) Value of Time,
(iii) Demand for improved quality and hygiene and (iv) Economic / Non Economy of small scale Chakkis. However,
the current position of wheat availability is very comfortable and this is reflected by overflowing wheat stocks
with the Food Corporation of India Therefore, with the easy availability of wheat for the next few years, increasing
urbanization, and rising income levels, the demand for the flour milling industry is expected to grow rapidly in the
future.
 The size of the Indian urban food market is estimated at Rs 350,000 Crore. The domestic market for
processed food is huge and fast growing. The retail boom will create a huge demand for the food-
processing sector in the coming years. Little wonder that 2007 has been designated the Year of Food
Technology.
 The private sector is yet to realize its full potential in the food-retailing sector, as the market is still to
explore. Though, it has now started discovering the money there is to be made in the urban food retailing
market. Urban centers have the potential of development process. But they do not produce food as they
lack agricultural land; on contrary the rural areas do. In that sense, the urban areas provide an assured
market for the food produced by farmers. The urban food marketing system thus assumes considerable
importance for both feeding the urban population and helping farmers.
 There are certain distinct characteristics of urban food demand. The urban population generally has a higher
purchasing power. The rising average income is leading to greater demand for high-value processed food.
A considerable number of urban women work, creating a demand for heat-and-serve foods.
 The urban population density is high and this demands a chain or a network of retail outlets. Indian food
retailing is poised for a quantum leap. Not only are newer names set to dot the retail landscape but also
such new formats, as hyper-and super-markets are to emerge.
 The key drivers for increased demand in value-added processed food products are: a) growth in consumer
class; b) change in lifestyle characterized by expanding urban population, increased number of nuclear
and dual-income families; c) change in attitudes and tastes with increasing modernization and to a lesser
extent westernization of tastes,particularly, of the youth; d) low penetration rates; and e) ability to offset
seasonal supply-and-demand effects in fresh products.
Technical Feasibility:

DETAILS OF THE PROJECT / INFRASTRUCTURE / CAPACITIES & PRODUCTION

A. Product Capacities / Raw materials
The 8 Body Roller Flour Mill & 4 Chakki Atta Plant, Machinery, Buildings and other Infrastructure designed
(as per details given below) to produce the following capacities. Wheat Roller Flour Mill & Atta Chakki Plant
capacities & proposed utilized capacities:
Particulars 2011-12 2012-13 2013-14 2014-15 2015-16
MT/ PA MT/ PA MT/ PA MT/ PA MT/ PA
Capacity of Roller Flour Mill Plant ( 120 TPD ) 39600 39600 39600 39600 39600
Capacity of Chakki Atta Plant ( 30 TPD ) 9900 9900 9900 9900 9900
Operating Capacity % 50% 55% 60% 65% 70%
Production Roller flour Mill products * 14850 21780 23760 25740 27720
Production Atta Chakki 3713 5445 5940 6435 6930

B. Land & Location of the project

The 120 TPD Roller Flour Mill plant along with 30 TPD Chakki Atta Plant is proposed to be located in 2_Acres of
leased land ( long term registered lease for a period of 12 years) at Survey No,31/A, Nadigama Village, Patancheru
Mandal, Medak district, Andhra Pradesh just about 10 Kms from Hyderabad. Patancheru also known as Patan
Choru, is a census town and mandal headquarters in Medak district located about 10 km from Hyderabad on the
Hyderabad-Sholapur highway.
The location has excellent approach roads, water resource and proximity to Power. The area being on the State
highway logistically is ideal to locate the unit. The area has all the infrastructure facilities such as adequate power,
skilled labor, transportation facilities for locating the plant. Thus the unit is located in a ideal location. The land
development include leveling of 2 acres, providing 20 and 12 feet roads in the eastern and southern sides
respectively for bulk movement of cargo and staff vehicles and building a Compound wall. The total cost of
development is estimated at Rs
1.94 lakhs.

(C) Factory buildings

The Company is proposing to build 24356 sq feet of factory RCC buildings to host plant machinery and other facilities
as per the food grade standards and to host the utilities such as power / water / security / steam etc. The drawings
and building outlay are ready for execution. The factory consists of processing and storage facilities. Processing
is carried out in three stages – Storage, Cleaning, Milling, Grinding, packaging, hosting of utilities, Administration
and general structure. All these facilities are provided in two buildings constructed as per FPO norms, the second
building would have central partition dividing the storage space and processing space. Administrative, security,
toilets and rest rooms are provided as per the requirement. The total cost of buildings is estimated at Rs 92.64
lakhs.

(G) Plant and Machinery & Process Technology:

Total cost of machinery is estimated, at Rs.232 lac’s based on quotations received from various vendors,
details of which are as under:
a) Cleaning (Preparatory) Section: Wheat procured, contains many impurities like sand, metal pieces, dirt and
gunny pieces. The process of the cleaning is primary sieving for the removal of large size impurities, brushing
for removal of dust attached to the surface of grain, removal of metal impurities. The machinery required for
the cleaning section mainly consist of drum sieve, classifier, magnets separator etc. Cleaned wheat is stored
in silos for conditioning before milling.
b) Milling Section: The three major parts of wheat are Bran, Germ and the Endosperm. The bran and germ is
separated as it affects the baking quality of the flour. The Roller Mill Process is a gradual reduction process
where bran and its parts are broken down in succession of relatively gentle grinding stage. Grinding is done
in Roller Mill with a pair of rolls mounted in parallel alignment that can be adjusted to do precision grinding.
At each grinding stage products consist of mixture of coarse, medium and fine particles including the portion
of the flour that are separated by sifting of material following each grinding stage. The produce is then sieved
in plan shifters. Pneumatic lifts are used to feed in at the top and passes from the sieves to sieves by
gravity flow. The machines required in Milling Section mainly consist of Roller Mills, Plan Shifters, Bran
Finishers, Reverse Jet Filters, Dampener, Pneumatic lifts etc.
c) Others: Roller Flour Mill will be fully automated and will have various other equipments such as Elevators,
Cyclones, Air lock, Conveying System, Screening System, Dust Collection equipments etc.
d)The miscellaneous fixed assets include furniture, jeep, weigh bridge office machines & equipment, fire-
fighting equipment, testing equipment, & transformer including HT (High Tension) line.

Manufacturing Process & Technology:

The technology for food processing industry is not complicated and mostly related to engineering. Good qualified and
experienced team of management exposed to running hi-tech plants, is sure to have an edge over the competitors. The
machinery suppliers extend all the necessary technical supports such as installation and upkeep.
Cleaning (preparatory) Section: The wheat contains many impurities like sand, metal
pieces, dirt and gunny pieces. Wheat is cleaned before processing
to remove coarse impurities like stones, chafe, stitching threads, woods, straws, dust
etc. Conveyors, Elevator, Drum Sieve, Reel Machine, Separator with aspirators,
magnet, etc. are used in pre-cleaning which improves the storability of the wheat.
.
Storage Silos: Cleaned wheat is stored in silos for the continuous process and making a
proper blend of wheat according to the requirement as needed for the end product mix.

First Cleaning: pre cleaned wheat is further processed to remove foreign ingredients
First Cleaning
that not only reduces the yield but also affects the taste and colour of the finished
goods. Auto weigher, flow balancer, Dry de-stoner, intensive dampener, magnets are
used in process and wheat is tempered at this stage.
 Second Cleaning: By absorption of water at 1st cleaning stage cellulose layer of wheat
Second expand, crack and get partly loose which is further tempered to have constant moisture
using Intensive Dampner, Flow Balancer, Scourer, Volumetric Measure, Automatic
Water Doser for smooth milling.

Grinding: For getting good extraction Gradual Reduction System of break is used to
Grinding separate the bran and endosperm. This breaking of wheat separating bran and
endosperm is a mechanical process done by passing the wheat through Rolls running
at different speed to produce a cutting and shearing action. Apart from Rolls Disc, Beat
and impact Detachers are used besides the elevators to move the product from one roll to
another

Purification: Semolina and Middling produced at grinding stage are separated from
Purification bran by air in Purifier Machines whereby a composite fractions composed of endosperm
with adhering bran are also separated.

Bran Finisher: Whatever flour remain in bran is cleaned using bran finisher and the
remaining bran is packed.
Bran
,

Packaging: Since the process is of Gradual Reduction therefore at each stage end products
are produced and sent pneumatically after sieving using Bolting Cloth in service Machines
Packaging and the finished product are packed for delivery in market

(H) Environmental Impact

This project is environmental friendly. Government of India has classified this in Green Category of industries.
The factory is situated adjacent to main road leading to National High Way and there is no threat to traffic congestion.
There is no dwelling close to the factory. The noise from the factory is very minimal. The factory has a potential to
employ the locals as the process involves huge man power. The expertise of the locals can also be used to the benefit
of the unit as most of the villagers are farmers. The presence of this environmental friendly unit would certainly help
improve the locality as service oriented facilities are bound to come up because of the manpower employed.

(I) POLLUTION ABATEMENT

Solid Wastes: The solid waste generated is only bran which is saleable and has commercial applications. Liquid
effluent: Nil, Air Pollution: There is no production of any obnoxious gases any where in the process.
Licenses & Regulatory permissions:
The Company has obtained the necessary approvals/permissions/licenses from the various authorities as listed
hereunder:
S.No. Item of Approval/License Status
/Permission
01 SSI Registration Received
02 Power Feasibility Under process
03 Environment Under process
04 VAT Registration Received
05 Factory Inspector Under process
06 Panchayat License Received
07 Estimates / Quotations Received

Resources
Raw Material:
The basic raw material is Wheat and it is the largest produced grain in India next to Rice.
International Scenario of Wheat Producing Regions
Major wheat growing countries include China, India, France, and Russia. Worldwide wheat is grown in Asia, Africa,
Europe and America. On basis of area maximum acreage comes from India that accounts for 13% of total world average,
followed by EU, Russia, China, USA, Australia, Canada and Kazhakastan. Total average is around 217 million hectare,
which keeps fluctuating between 210 million hectare to 230 million hectare in general.

(Source: Multi Commodity Exchange of India Limited)

World Wheat Production
World production of wheat hovers around 585 million tons. Maximum contribution comes from European
Union, which comprises 25 countries followed, by China, India, and United states.
(000 Tonnes)
Countries 2000-01 2001-02 2002-03 2003-04
EU-25 124,197 113,553 124,483 106,615
China 99,640 93,873 90,290 86,490
PRODUCTION

India 76,369 69,680 71,810 65,100

United States 60,641 53,001 43,705 63,814
Russia 34,450 46,900 50,550 34,100
Australia 22,18 24,299 10,132 26,231
Canada 26,519 20,568 16,198 23,552
World Total 581,377 580,930 566,963 552,828

(Source: USDA)

World wheat consumption is consistently growing. Long-term trend supports the fact that is evident from above
chart. Wheat being one of the major staple foods all across the world demand seems to remain strong owing to
increasing population. Two major consuming countries of wheat are EU, China, India, Russia, USA and Pakistan.
Wheat has made the largest contribution to the growth of food grain production in India. This is shown by the
growth rates: wheat production has grown at a much faster pace compared to other food grains. During 1974 –
2010, when total food grain production grew at an annual rate of 3.68 per cent, wheat production grew at 5.36
per cent. Even in the last decade, wheat production is showing the fastest growth. The growth in wheat
production has come from increase in yield as well as expansion of area. The increase in area sown has come
at the expense of coarse cereals and pulses area, and from an increase in cropping intensity through multiple
cropping.
WHEAT ALL INDIA PRODUCTION IN MILLION TONS – 1974 - 2010

WHEAT - ALL INDIA PRODUCTION

MILLION TONNES

90
80

70
60

50
40

30
20

10
0
1973-74
1974-75
1975-76
1976-77
1977-78
1978-79
1979-80
1980-81
1981-82
1982-83
1983-84
1984-85
1985-86
1986-87
1987-88
1988-89
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-2000
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10*
ACTUAL PRODUCTION
PRODUCTION TREND

YEAR

Nationally about 18 per cent of the net cropped area is planted to wheat. Figure 1 shows the shares of
different states in the national wheat production. Uttar Pradesh (U.P.) contributes the largest share with 36 per
cent of production, followed by Punjab with 19 per cent and Haryana with 11 per cent. These three northern
states together contribute two-thirds of the production of wheat. These are followed by Madhya Pradesh (M.P.)
11 per cent, Rajasthan 10 per cent, Bihar 6 per cent and Gujarat 3 per cent. All the rest contribute only 4 per
cent. As expected, the major wheat growing states are all in the north.

Figure 1: Distribution of Wheat Production across States

Gujarat 3% Rest of India 4%

Bihar 6%

Rajasthan 10% UP 36%

MP 11%

Haryana 11%
 Source: Based on data from India, Directorate of Economics and Statistics 2010
Another feature of wheat production is that the wheat yields vary substantially across the states, as shown above.
Punjab and Haryana show the highest yields of 3853 and 3660 kg/ha, respectively. These are followed, after a
significant gap, by Rajasthan, U.P. and Gujarat with 2500, 2498 and 2373 kg/ha respectively – which are close to
the national average of 2583 kg/ha. Bihar and M.P. follow with much lower yields of 1999 and 1625 kg/ha,
respectively. These yields can be compared with 2907 kg/ha in USA, 1907 kg/ha in Australia, 1029 kg/ha in
Russia, 3667 kg/ha in China and 7603 kg/ha in France (FAO 1998).
CROP CALENDER OF WHEAT IN INDIAN MAJOR WHEAR GROWING STATES
State Sowing Harvesting
Assam Nov(B) - Dec(M) Mar(B)-Apr(E)
Bihar Nov(M)-Dec(E) Mar(M)-Apr(E)
Gujarat Oct(B)-Nov(E) Feb(B)-Mar(E)
Haryana Oct(E)-Dec(B) Apr(M)-Apr(E)
Himachal Pradesh Oct(B)-Nov(E) Apr(M)-Jun(E)
Jammu & Kashmir Oct(B)-Dec(E) May(B)-May(E)
Karnataka Oct(B)-Dec(E) Jan(B)-Feb(E)
Madhya Pradesh Oct(M)-Dec(E) Feb(M)-Apr(E
Maharashtra Oct(B)-Dec(E Feb(B)-Mar(E)
Orissa Oct-Nov Mar-Apr
Punjab Oct(B)-Nov(E) Apr(B)-May(E
Rajasthan Nov(B)-Dec(E) Mar(B)-May(E)
Uttar Pradesh Oct(B)-Jan(M) Apr(B)-Apr(M)
West Bengal Nov(B)-Dec(E) Mar(B)-Apr(E
All India Oct-Dec Feb-Jun

Procurement of Wheat will be made from Western and Northern parts of India through use of Commission
agents and commission net work. With abundant availability through production and a well oiled distribution system,
the procurement of the Raw Material does not pose any problem.

Simplified Outline of the Marketing System of Wheat in India

Farmers - SOURCE

Primary Market
Commission Agents

Processors / Flour Mills Urban Whole Sellers

State Civil Supply

Consumers – END
CONSUMPTION

(D)Power & Fuel

Power requirement of the Roller Flour Mill plant is estimated at 500 KVA and is proposed to be obtained from
the local Power grid. The Power received at 33 KV would be stepped down to 415 volts by means of transformer
located in the main step-down sub-station (MSDS) and would be fed into the low tension switch board located in
MSDS. One diesel-generating power set of 250 KVA rating at 430V, 50 Hz is proposed as a standby to meet the
emergency power requirement of vital units of the plant requiring uninterrupted power supply in case of power
cuts. The total cost of Power from APCPDCL is estimated at Rs lakhs along with HT cabling, internal
wiring, switches and internal lighting is estimated at Rs lakhs.
(E)Water Requirements
The Flour mill Plant would require water for cleaning, washing of about 10,000 liters of water on a continuous
basis. The unit has a 3” bore well along with storage tanks above the ground in the supply network to take care
of the make up water requirement. In addition to the above around 1000 liters of water is required for human
consumption and sanitation.

(F) Project Implementation Schedule:

The unit is proposing to complete the entire implementation of the project in 6 months time. The company has
already purchased required land, completed all the legal formalities, identified and ordered equipment, and have
completed finalizing commission agent network all over India to sell the entire production on a continuous basis.
The project implementation is proposed to be as per the following chart.

ACTIVITY DEC JAN FEB 11 MAR 11 APRIL 11 MAY !! JUNE 11

YEAR
Land Purchase
Land Development
Civil Works
Machinery Order
Receipt of machinery
Electrical works & Power
Erection of machinery
Trial Production
Commercial Production

 The project is proposed to be executed for commercial production by June 2011

 The company had already started construction of the factory
 The machineries are being finalized.
 Thus for the projected FY 2011 the results comprise of 6 months operation only.
 CAPEX & PROJECT FINANCIALS

The total CAPEX, Means of finance & the projected repayment capabilities of the company are depicted below
for having an understanding about the company’s potential for implementing the project and repayment of the
loans.
Project Cost Rs lacs Loan % Loan
(a) Land on lease
(b) Land, Development Anex1 1.94 0.00% 0.00
(c ) Buildings and construction Anex 1 132.37 70.00% 92.64
Anex 2
(d) Plant, Machinery & Utilities 309.29 75.00% 231.97
(e) Electricity Deposit 15.00 0.00% 0.00
(f) Power Connectivity / Cables /
Pole's 10.00 75.00% 7.50
Anex 3
(g) Preop Exp) 14.14 50.00% 7.07
Anex 4
(h) Office and other misc equipment 2.00 75.00% 1.50
3.00%
(i) Contingencies 13.25 75.00% 9.94
25%
(j) Working Capital Margin 80.00 0.00% 0.00
Total Project Cost 578.00 350.62

Projected Performance/Financial Indicators:

S.No Particulars 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

1 Domestic Sales(Gross) 2992.75 4513.46 4917.32 5327.75 5738.19 5746.08
2 Export Sales 0.00 0.00 0.00 0.00 0.00 0.00
3 Net Sales 2992.75 4513.46 4917.32 5327.75 5738.19 5746.08
% rise/fall (-) in net
sales 50.81 8.95 8.35 7.70 7.85
4 Operating Profit 184.92 294.65 324.60 354.74 388.79 387.24
5 Profit Before tax 124.38 219.40 259.15 299.09 342.94 349.96
6 PBT/ Sales (%) 4.16% 4.86% 5.27% 5.61% 5.98% 6.09%
Profit After Tax
7 Cash Accrual 90.70 154.32 179.81 205.89 235.03 238.68
8 Paid Up Capital 137.39 201.01 226.50 252.58 281.73 285.37
9 TNW 228.00 228.00 228.00 228.00 228.00 228.00
Adjusted TNW
10 TOL/TNW (times) 318.70 473.02 652.83 858.71 1093.74 1332.43
11 Adjusted TOL/TNW 304.56 458.88 638.69 844.57 1079.60 1318.29
12 1.89 1.13 0.71 0.47 0.30 0.21
13 1.97 1.16 0.73 0.47 0.31 0.21
14 NWC 110.75 241.75 398.26 580.84 1095.44 1095.44
15 Current Ratio 1.33 1.71 2.16 2.67 3.44 4.92

Other Ratios 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

1 Operating Cost/ sales % 6.18% 6.53% 6.60% 6.66% 6.78% 6.74%
2 Net Sales /TTA (times) 3.30 4.55 4.45 4.28 4.06 3.60
PBDIT
3 8.03 21.68 48.07 66.35 66.35 66.35
EFFICIENCY RATIOS As on 31st March

Particulars 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

1 Net Sales/ Total Tangible ( times ) 3.30 4.55 4.45 4.28 4.06 3.60
2 PBT/ Total Tangible Assets (%) 13.73% 22.10% 23.45% 24.04% 24.29% 21.90%
3 Operating Cost to sales (%) 6.18% 6.53% 6.60% 6.66% 6.78% 6.74%
4 Bank Finance/ Ct. Assets (%) 53.39% 41.17% 32.33% 25.87% 17.45% 17.45%
5 Inventory+ Receivables to net 53 45 47 47 47 47
6 PBDIT 231.61 341.34 371.29 401.43 435.48 433.93

RISK RATING RELATED RATIOS

S.No Particulars 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

1 Current Ratio 1.33 1.71 2.16 2.67 3.44 4.92
2 TOL/TNW (times) 1.89 1.13 0.71 0.47 0.30 0.21
3 PBDIT/Interest (times) 3.83 4.54 5.67 7.21 9.50 11.64
4 PAT/Net Sales (%) 3.03% 3.42% 3.66% 3.86% 4.10% 4.15%
5 ROCE (%) (PBDIT/TA) 25.18% 33.91% 33.17% 31.91% 30.54% 26.92%
6 INV+REC./Sales (days) 53 45 47 47 47 47

SECURITY MARGIN %
S.No Particulars 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
1 Written Down Value 441.30 394.61 347.92 301.23 254.54 207.85
2 Loan Outstanding 332.50 262.50 192.50 122.50 52.50 0.00
3 Margin 108.80 132.11 155.42 178.73 202.04 207.85
4 Security Margin % 24.66% 33.48% 44.67% 59.33% 79.37% 100.00%

Movement of TNW
Particulars 2011 2012 2013 2014 2015 2015
Opening balance 0.00 304.56 458.88 638.69 844.58 1079.61
Add.
i Profit/(-)Loss after Tax 90.70 154.32 179.81 205.89 235.03 238.68
ii Increase in Capital 228.00
iii Dec./(-) Inc.in Intangible Assets -14.14
iv Inc../(-) \ Dec.in Reserves 0.00
v. Increase in Quasi Equity 0.00
Less : Dividend 0.00
TNW 304.56 458.88 638.69 844.58 1079.61 1318.29

Credit Limits – Existing and Proposed

Credit Limits (Proposed): (Rs. in lacs)
Limits % Total Cons/
MBA
CC 100% Nil
TL 100% Nil
Total FB Limits 100% Nil
Assessment of WC facilities:
Particulars 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
Raw Material : a) Indigenous 71.92 73.02 79.66 86.30 92.94 92.94
Months 0.25 0.23 0.23 0.23 0.23 0.23
Stock in Process 0.00 0.00 0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00 0.00
Finished Goods 76.37 77.27 84.17 91.08 97.98 98.03
Months 0.26 0.23 0.23 0.23 0.23 0.23
Other Spares : a) Indigenous 7.00 8.00 9.00 10.00 10.00 10.00
Months 12 13 13 13 12 12
Receivables : a) Domestic 277.11 403.67 455.31 493.31 531.31 532.04
Months 0.83 1.07 1.11 1.11 1.11 1.11
Receivables 277.11 403.67 455.31 493.31 531.31 532.04
Months 0.83 1.07 1.11 1.11 1.11 1.11
S. Creditors 28.77 31.21 34.05 36.89 39.72 39.72
Months 0.10 0.10 0.10 0.10 0.10 0.10
Other Creditors 70.00 70.00 70.00 70.00 52.50 0.00
Other Current Assets 17.12 21.00 114.17 247.03 410.05 642.15

Assessed Bank Finance:

Particulars 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Total CA 449.52 582.96 742.31 927.72 1142.29 1375.16
Other CL 98.77 101.21 104.05 106.88 92.22 39.72
Working Capital Gap 350.75 481.75 638.26 820.84 1050.07 1335.44
Net Working Capital 110.75 241.75 398.26 580.84 810.07 1095.44
Assessed Bank Finance 240.00 240.00 240.00 240.00 240.00 240.00
NWC to TCA (%) 24.64% 41.47% 53.65% 62.61% 70.92% 79.66%
Bank Finance to TCA % 53.39% 41.17% 32.33% 25.87% 21.01% 17.45%
S. Cr. To TCA (%) 6.40% 5.35% 4.59% 3.98% 3.48% 2.89%
Other CL to TCA (%) 15.57% 12.01% 9.43% 7.55% 4.60% 0.00%
Inv. To Net sales (days) 14 13 13 13 13 13
Rec. to gross sales (days) 25 33 34 34 34 34
S. Cr. To purchases (days) 3 3 3 3 3 3
 Present Proposal with State Bank of Hyderabad
Facility Present Limit Proposed Limit

CC limit (Hypothecation of Receivables) Nil Rs 240.00 Lacs Term Loan

Nii
Securities collateral security apart from primary assets Repayment of
Term loans.
 The Project implementation has commenced and is proposed to be completed for commercial production
by June 2011.

 The term loan is thus proposed to be repayable in 5 years i.e 60 monthly installments along with interest
with a initial holiday of 12 months. i.e first 6 months for project implementation and the balance 6 months
for stabilizing the cash flows.

PROJECTED OPERATIONAL RESULTS

Detailed data on operational expenses and profits for the forthcoming 6 years of projected operations have been
worked out and given in the statement annexed. While working out estimates, prices of inputs and selling prices
of outputs have been kept at constant rates assuming that any increase in inputs cost would be effect by
proportionate increase in the selling price. Marginal increase has been provided in other operational cost to cover
effects of possible inflation.

CASH GENERATION & REPAYMENT SCHEDULE

Based on the estimates of cash generation from the operations and considerations the need to retain certain
funds for meeting any other contingent situations, plans for repayment of the loan has been worked out and
enclosed as annexes. By the end of the third year the company shall be self sufficient to meet the enhanced
working capital limits /or /for expansion or diversification

PROJECTED CASH FLOWS

A projected cash flow statement of the company at the end of the projected 6 years of working has been drawn up
and given in the statement enclosed. The pictures emerges from a glance of the date, spread for the 6 years i.e.
Increasing levels of reserve accumulation and decreasing borrowings on the one hand and increasing levels of
current assets on the other with comparatively very less amount blocked in fixed capital. The data also reveals
a comparatively high ratio of equity to debt depicting a growing strong capital base of the unit over loan funds in
the business.
CONCLUDING REMARKS
GENERAL: From the foregoing detailed analysis of the proposal towards Term loan and working capital finance for
Shri * Pvt Ltd it can be concluded that the Company has been extremely careful and selective in preparing its
business program. It has drawn up the scheme after adequately studying Wheat and Wheal products market in india.
The plans have been made in such a way that the salability of the market could be almost assured with least
marketing cost. The firm has already made a committed commission agents network in place thus the sale is firmly
committed.
TECHNO ECONOMICAL ASPECTS : The Group are well experienced in procuring Wheat and trading in Wheat based
products for the last 5 years. The core founders are qualified and experienced persons and posses all required
technical know-how in selling their products and commercial expertise to run the business of a day to day basis..
The founders would be on full time occupation with the company. A suitable and broad based marketing network is
already available which could be taken expanded further if found necessary to achieve for proposed sales targets.
FINANCIAL ASPECTS : The Capital investment proposed is comparatively low and the founders have necessary
resources to bring in and organize the proposed capital. The financial assistance sought from Bank is well within
normal of lending. The projected operational results show reasonable profit generation by the unit to enable it to
meet its debt servicing obligations. A considerable part of cash generation is also proposed to be ploughed back
every year to supplement future working capital requirement. Thus the venture is a thoroughly well planned
organization and is a sound and viable proposition.